STEELYARD COMMONS DEVELOPER IRONS OUT DEAL WITH WAL-MART; PROJECT TO MOVE FORWARD

Industrial-themed redevelopment will create 1,800 jobs and more than $3 million in payroll and real estate taxes to Cleveland

May 17, 2005 (Cleveland) – Building plans were filed today for the construction of a Wal-Mart Supercenter at Steelyard Commons, a $120 million commercial redevelopment project that will transform an abandoned industrial area into the largest open-air retail center ever to be built in Cuyahoga County.

Located on 125-acres in the industrial valley, Steelyard Commons is expected to generate 1,800 jobs and $3 million annually in property taxes that will go directly to support neighborhood services including police, fire, parks and recreation.

The project, proposed by Lyndhurst-based First Interstate Properties, will include a Wal-Mart Supercenter, The Home Depot, Target and other national retailers. Final negotiations are being held with Staples, Best Buy and many others. At completion, the project will encompass more than one million square feet of modern retail, at least six sit-down restaurants and other service conveniences. Next week, First Interstate will attend the nation’s foremost retail leasing convention to continue the tenanting of the project.

"Bringing these national retailers to Cleveland to serve its neighborhoods will improve the quality of life for the residents of Cleveland’s neighborhoods as they no longer will have to drive to the suburbs to visit the stores they’ve grown accustomed to shopping," said Mitchell Schneider, president of First Interstate Properties.

Additionally, the project’s revitalization of the former LTV steel mill site will create a unique sense of place, honoring the land’s history while incorporating recreational options such as the Towpath Trail, a planned stop on the Cuyahoga Valley Scenic Railroad, and community gathering places like a children’s playground designed to resemble a steel mill as well as public art. With the extension of the pedestrian trail, bikeway and rail, Steelyard Commons will provide a significant place to bring recreation enthusiasts, tourists and residents close to the heart of the industrial valley, neighborhoods and downtown.

Steelyard Commons is the only retail project of this magnitude designed to specifically serve its diverse and densely populated neighborhoods. The project will give city dwellers the same shopping choices that suburbanites have, and will result in a host of economic benefits including:

• 1,800 full-time jobs with at least $35 million in annual payroll
• $700,000 in annual payroll taxes to Cleveland
• $3 million in annual property taxes
• $1.8 million annually to the Cleveland Municipal School District

The project will be built with no city subsidies during a time that finds other cities compiling multi-million incentive packages to lure similar retail developments.

"This project will bring a needed retail base to Cleveland and create new job opportunities and economic activity to support the city’s coffers," said Mayor Jane Campbell. "Coupled with the Flats development announced this week, we can better retain and attract residents and bring businesses back to the city. Because Steelyard Commons requires no city subsidies, we can focus public support toward other critical neighborhood rejuvenation projects, including supporting downtown so that it can attract residents and boost urban retail in the central business service area."

"Steelyard Commons will provide another base to the revitalization already underway in the Industrial Valley and neighboring areas including Tremont, Ohio City and Clark-Metro," Campbell added.

More than 320,000 Clevelanders live within five miles of the project area. The development would also capture some of the estimated $600 million that Cleveland residents spend on general merchandise annually outside the city’s borders. In March, First Interstate conducted a poll that indicated 90 percent of Cleveland residents were traveling to other communities to shop at Wal-Mart.

In March, Wal-Mart indicated its decision not to pursue this location any further. This conclusion was based on initial plans to build a discount store, with the option of expanding to a Supercenter in the future. Wal-Mart looked very closely at that proposal and eventually concluded that the economics of operating a smaller discount store at Steelyard Commons did not work.

Meanwhile, First Interstate has continued to move forward with plans for the project. When it became clear that there would not be a free-standing grocery store in the project, this allowed Wal-Mart to build a Supercenter up to 220,000 square feet on the parcel. That change makes participation in Steelyard Commons a potentially economically viable option for Wal-Mart.

"Wal-Mart looks forward to becoming more convenient to our Cleveland customers and an active member of the Cleveland community. We appreciate the show of support from elected officials, members of the business and minority communities, and our many loyal customers who live in Cleveland," said Keith Morris, Senior Manager, Community Affairs, at Wal-Mart Stores Inc.

Steelyard Commons will help to connect thousands of tourists and recreational enthusiasts to Cleveland. The project will provide nearly one mile of the planned Towpath Trail extension to downtown in two separate pathways through the development, and will support plans to extend the 51-mile Cuyahoga Valley Scenic Railroad excursion to downtown as well. Nearly two million people use the towpath and more than 100,000 ride the Cuyahoga Valley Scenic Railroad annually.

First Interstate has stressed its commitment to preserving Cleveland’s industrial past since buying the property. Artifacts from the once thundering steel mills will be incorporated as public art throughout the project. Among other amenities, visitors will see:

• A Steel Heritage Exhibit along the towpath trail and scenic bikeway;
• Architectural facades reminiscent of the historic buildings that once stood on site;
• Railcars serving as a backdrop for themed entrance signage and points of interest along the towpath;
• Active, working rocker-arm gas wells animating the site;
• Bus shelters constructed of reclaimed steel;
• An existing bridge relocated to span the project’s main road as a gateway;
• A crane as well as other salvaged artifacts as public art throughout the site;
• Light towers and a power substation illuminated similar to Cleveland’s bridge lighting to create a dramatic place; and
• A Children’s Steel Mill Playground.

"I am very proud of this project," said Mitchell Schneider, president of First Interstate Properties. "It respects the unique history embodied by the site and the stories of the workers that built Cleveland’s skyline. Where once booming steel mills now sit dormant, we can finally provide the link for the Towpath Trail and Scenic Railroad to support downtown. This project will once again create an economic engine on land once utilized for Cleveland’s steelyards and attract a new form of economic support – in the form of retail dollars to help continue rebuilding the community."

"We will continue to work with our public sector partners and neighborhood organizations to ensure this project achieves long-lasting success, is a catalyst for the continued growth of surrounding neighborhoods, and gives residents another reason to say they are proud that they live in their Cleveland neighborhood," he added.

STEELYARD COMMONS – Project Highlights

• A $120 million commercial redevelopment project that will transform an abandoned industrial area with a suburban-like retail center, marking the first major multi-retail tenant development project to be built within the City of Cleveland in more than 20 years.
• Expected to generate 1,800 jobs and $3 million in property taxes that will go directly to support neighborhood services including police, fire, parks and recreation, and $1.8 million annually for the Cleveland Municipal School District.
• Located on 125-acres, the project will offer more than 1 million square feet of retail that would help capture some of the estimated $600 million that Cleveland residents spend on general merchandise annually outside the city’s borders.
• Tenants to include a Wal-Mart Supercenter, The Home Depot, Best Buy, Target and Staples.
• The project will extend both the Towpath Trail by more than one mile and allow for the potential to extend the 51-mile Cuyahoga Valley Scenic Railroad. With the expansion of the pedestrian trail, bikeway and rail, Steelyard Commons will provide a significant place to bring recreation enthusiasts, tourists and residents close to the heart of the industrial valley, neighborhoods and downtown.
• Requires no city subsidies.
• Preserves and respects Cleveland’s industrial past with amenities and architecture that recalls the history of steel making including a steel heritage exhibit, the re-use of salvaged artifacts as public art, a utility bridge as a gateway entry, towers, cranes, working rocker-arm gas wells, railcars, bus shelters constructed of reclaimed steel, a children’s playground designed in the look of a steel mill and dramatic lighting.